January 5, 2016

Has the Smart Phone Industry Matured?

Hi Guys,

Long back, I had written a post on how Samsung was losing its plot in India in the Smart Phone segment. In this post, I try to find out the way the Indian Smart Phone Industry is panning out and how different players are fighting it out.

Has the Smart Phone Industry matured?
Large Displays, Better RAMs, Better Resolution, More Megapixels… This is how brands are differentiating. Even the flagships have concepts like Force Touch, Iris Scanner which are not really great innovations. Today any smartphone in the range of Rs. 10000 has a good screen, decent camera and a big display. And brands matter less and less. So many Chinese brands are coming in. Nubia, Meizu, PhiComm, Coolpad… These are some of the brands that came in last year and had a decent crowd going for it. Reliability has not been a big question mark as the OEM tends to be the same player. The newsmakers have been fast shifting… From Motorola to Xiaomi to OnePlus to Asus in a span of 2 years.

Flagships are not really attention seekers anymore. Who would spend 40000 bucks on a phone when a 10000 bucks phone has 75% of those features. Apple thought it could extract its brand premium and priced 6S at a whopping price of Rs. 62000. Only to realize that Indians value their money and had to reduce price by nearly 15% overnight.

Do UIs Matter?
With majority of phone makers coming out with their own UI like MIUI (Xiaomi), Zen UI (Asus), Oxygen OI (OnePlus), does it really matter to the end user? Some of the UIs are pretty different, but none difficult to manage. The interface remains pretty much the same. And it doesn’t seem to be a key feature that impacts Buying Behaviour. Before OnePlus Two came out, CyanogenMed (which was used in Oneplus One) was highly critical and said OnePlus Two would fail because there was no Cyanogen. OnePlus said Oxygen UI is the best UI that is available today. But, no one bothered about the UI. No one either criticized or praised Oxygen UI.
I just wonder why many companies donot stick to the stock UI like Motorola. It is less complicated, straight forward to use and people find it good. So, why spend lot of R&D on a UI which is really not different?

Less Choice is better?
There is a concept in Behavioural Economics which states that lesser the choice, better the proposition. More the choice, people tend to get away or become confused. Most of the companies had a very good sales in the first generation – Motorala (Moto E, Moto G, Moto X), Xiaomi (Mi3, Redmi 1S), One Plus One and Asus Zenfone. Once these phones started coming out with more and more models, people started getting confused and the sales started dipping.

Any new Game Changers?
One of the key requirements of users these days is better batteries. But if you raise the capacity, the phone becomes heavy. What we need is an innovative technology that could provide better powerful batteries. I don’t think any of the existing companies are looking to solve this. The solution could come in from a new player who specializes in manufacturing batteries (someone like Panasonic or maybe Tesla or a new kid in the block).

Apart from that, most of the innovations claimed by companies are really not Game Changers. And again they are easily imitable in nature. The Industry looks to have hit a plateau where larger display, more MPs and better resolution are available with everyone and are affordable too.

Worldwide too, it doesn’t seem vastly different with Apple gorging up 94% of the Smartphone profits despite selling less than a third of the smart phones. The remaining players fight for the 6%. Apple has been able to play with its brand name, replacements and stature. But, not sure how long it would convince people to buy Apple, just because it is Apple…

It appears to have lot of parallels with the PC industry. Effectively, it looks like a field where everyone around looks the same and you got to sell more, spend less to make more profits…

Happy Reading!